“The Circle is Now Complete”
One of the major differences between stories and real life is that the ideal narrative story tends to come full circle in the end. This proves very satisfying for the audience. For example, take the classic student-becomes-the-master, child-becomes-the-parent, victim-becomes-the-victimizer, victim-becomes-protector-of-victims tropes, (there are a few others, basically, one character starts as young/innocent and eventually takes on the role of the older teacher character to a young innocent by the end of the story). The circle trope is even referred to openly in Star Wars (i.e. “the circle is now complete-- when first we met I was the learner. Now I am the master”).
Gangster films hew very closely to this pattern. You start with a kid in the hood witnessing violence. Kid turns to gang to help protect himself. Then you end with a send where the original kid ends up as a perpetrator to violence, an recognizes himself in the young kid who inadvertently witnesses the carnage. (There is a good scene of this archetypal element in a film some friends of mine were in called “Baby” about Asian gangs in LA).
Upon seeing that he has become the violent gangster he was so afraid of in the beginning, the character has a moment of self-realization where he either embraces or rejects his new role in the circle.
Joseph Campbell in “Hero with a Thousand Faces” talks a lot about this sort of thing. I have only read exerts of his book, so I don't claim to be an expert on it.
The only caution I can give is that a narrative does not HAVE to be circular for it to work emotionally for an audience. The circular narrative is only one particular pattern. If it works for your story, great, if not, your story may not be the sort of narrative that lends itself to a circular pattern. Sometimes I feel that once Hollywood got wind of this idea, they over used it, trying to squeeze stories into the circular narrative pattern when it didn't feel earned or appropriate. Don't circular just for the sake of being circular. The surprise circular ending is just another trick in your infinite narrative bag, it is not a “must.”